Latin America LTE Smartphones Grew 196% Annually in Q2 2016

According to the latest Market Monitor Report from Counterpoint Research, the Latin America smartphone market contracted by 14% YoY and almost flat sequentially. However, the LTE capable smartphones segment grew a massive 196% annually.

Counterpoint Research’s Senior Analyst, Tina Lu, commenting on the slowdown, “The June ending quarter normally sees a seasonal uptick in demand, due to Mother’s Day celebrations and this time with Rio Olympics build up, demand was expected to pick up. However, the overall smartphone market demand dipped during the quarter mainly due to the markets such as Brazil & Venezuela marred by unstable political conditions and buildup of years of mismanagement of resources – leading to a weaker economic climate.”

However, markets such as Peru, Mexico and Argentina registered annual double digit growth, which somewhat offset the downturn in Brazil and Venezuela. The key factors driving the growth in these markets were the increasing adoption of LTE smartphones as operators transition from saturated 3G to 4G networks, declining price for 4G smartphones (-45% YoY) and a relatively positive economic climate. Three in four smartphones shipped during the quarter was LTE capable.”

Counterpoint Research’s Research Director, Jeff Fieldhack, added, “Like mobile operators, mobile phone OEMs have been transitioning to LTE portfolios with Samsung, LG, Motorola and Alcatel leading the way. The largest vendor in LATAM, Samsung, upgraded most of its portfolio to LTE led by the J-series, which has proven to be very popular. Its popularity has driven most of the LTE volume growth for Samsung in the region.”

“Markets such as Brazil and Mexico have seen good LTE growth, but because of manufacturing laws and the need to have strong business ties with the key players, it has proven difficult for some of the fast-growing Chinese brands such as Oppo and Xiaomi. In the June quarter Oppo reached the top position in the Chinese market. However, during the same period the company pulled out of Mexico having failed on its go-to-market strategy with America Movil. Similarly, Xiaomi did not perform well in Brazil and is on the brink of pulling out of the country. Established Chinese brands such as Huawei, Alcatel and Motorola have fared better either holding or gaining market share in a contracting market. This illustrates that for new brands to succeed in Latin America, it is imperative to cultivate long-term relationships with operators and various offline channels.”

Market Summary:

Eight out of ten mobile phones shipped in LATAM were smartphones.

The overall smartphone market contracted -14% YoY.

This decline was mainly due to the decline of the largest smartphone market in LATAM, Brazil, which saw smartphone demand decline a significant -19% YoY.

Besides Brazil, both Chile and Venezuela also registered YoY declines. Venezuela saw the steepest ever decline of 40% YoY as it is currently suffering from an economic crisis with inflation reaching an all-time-high of 482%.

Senior Analyst
Tina has extensive consulting and analysis experience across a number of industry sectors including more than 14 years in the technology industry. Before Counterpoint, Tina spent more than 9 years in Nokia working in multiple roles and geographic regions. Tina also worked in brand and product marketing for Bestfoods-Unilever and BGH. Tina holds an MBA degree from the Thunderbird School of Global Management.